Home' The Channel Magazine : National Newsagent July 2012 Contents National Newsagent July 2012
IS IT THE END OF THE PRINTED
One of the world’s richest men, Warren
Buffet is buying newspapers and Gina Rinehart
is investing in Fairfax at a time when the print
product is in trouble. Why is this?
According to one commentator, there is
an the intriguing possibility that newspapers–
maybe like cigarettes–are settling somewhere
close to a new equilibrium and may soon start
to make money again as a re-engineered
industry. Warren Buffett is famous for saying:
“Be fearful when others are greedy, and be
greedy when others are fearful.”
Whether newsagents should write off
newspaper sales as part of their product mix
will only be revealed over time. Diversify they
must, watch and wait.
TO GO TABLOID SIzED
Fairfax announcements included a series of
radical moves including The Age and The SMH
moving to a compact size format, the closure
of print works, the axing of 1,900 jobs and the
introduction of paywalls for online content.
The two newspapers will move to a compact
size format in nine months’ time.
A key challenge the company will now face
with the advertising market will be negotiations
over rate card for ads in the smaller size print
The move is also a signal that the company
is preparing for a time when the newspapers
are no longer in print format, referring to
moving the business “to a digital-only model if
that is what is required in the future”.
FAIRFAX EXAMINES ALL
Fairfax Media is prepared to examine all
options to find a profitable way forward. With a
90 per cent fall in the share price since 2007, a
successful digital strategy is imperative. Where
this leaves newsagents is anybody guess.
The “Fairfax of the Future” strategy being
pursued by CEO Greg Hywood involves reducing
the print circulation of the major metro dailies
by gradually cutting out unprofitable newspaper
sales. There was even speculation that the
board was considering abandoning the print
versions of the Monday to Friday newspapers in
Melbourne and Sydney.
Advertisers are no longer interested in
numbers for their own sake. They now value
targeted, data-heavy advertising rather than
Greg Hywood told staff, “Fairfax Media is on
a journey from a predominantly print business
to a predominantly digital business. Our ‘Fairfax
of the Future’ plan to reshape the business
is far-reaching. While the proposed changes
would necessarily have a substantial impact on
our people, we are determined to deliver on the
transformation of our business. We know we
are on the right course and the result will be a
vibrant and growing Fairfax Media.”
He called on staff in early June to stop
“dysfunctional” aspects of the company’s
culture in a bid to turn their fortunes around.
This came as their shares hit a record low
of 58c, amid fears of a profit warning with
dwindling print advertising revenues.
LIKE FAIRFAX, NEWSAGENTS
MUST CONSIDER ALL
Newsagents may diversify in all manner of
ways from upmarket gifts to sandwiches and
coffee. All possibilities should be examined.
What radical steps could you take to tailor
your business for the future?
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makeS The HARD DECISIONS
June saw Fairfax Media announce major changes to staff, direction and print in its
restructuring of the company. Commentators all frothed at the mouth about the demise of
newspapers and yet it is part of a change that has been progressing for some years.
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